>> i hope you will come back despite the abuse you took this hour. >> there's a lot of sharks in australia. >> i'm very comfortable with sharks. >> they nibble at your heels. markets, where are we? >> the s&p hit a record high earlier on today but down monday, big tuesday. the nasdaq is up. thanks for watching "street signs," everybody. "the closing bell" is next. and welcome to "the closing bell." i'm kelly evans at the new york stock exchange. >> i'm scott wapner today in for bill griffeth. we're watching a market that's going to be a dog fight now in this last hour for positive and negative territory. the s&p earlier hit a new high. now it's going to be arfight. it's down a point or so, but materials, financials, and industrials are the ones leading the way today. there you can see the dow and the s&p still negative. nasdaq though making its way positive. >> coming up on today's show -- >> investing icon bob olstein is

here. none of his topics are facebook or twitter. he says social media stocks are out of control and should be out of your portfolio. >> also get a read on the economy ahead of friday's key jobs report and that's with bob nardelli. he's a little worried and he's here exclusively to tell us why. and united airlines launching a crackdown on carry-on luggage. we'll have a special report ahead. and in the markets right now as mentioned, the dow is off 40 points. the s&p 500 is now slightly negative 1,872 as we head to the final hour. >> joining us in our closing bell exchange, it's susanç

fulton, nathan bachrach, steve fitzgerald, david kudlow, our own steve liesman and rick santelli. steve, i'll begin with you. what did the beige book tell us that seemed to confirm what everyone has been talking about, that one word that's dominated for the last two months, weather. >> i feel like i got hit with another storm. it got down to minus ten. the beige book mentions the word weather 119 times according to the word count program. that compares with just 21 in the last month and 18 a years ago. so weather a big factor. what was interesting was the areas that it hit. you know, rail traffic in dallas, homes throughout the country, manufacturing in nine different districts. so to me it does two things. it confirms, as you said, the notion that there was a big impact of the weather, and it sets us up for the markets to maybe look beyond what could be a soft jobs report. >> nathan, does any of this

matter? >> it doesn't matter at all. the one thing i find amazing about the beige book besides the fact this they could pick a color in washington is this is proof that absolutely if you have a bachelor's of arts in english, there is a job for you somewhere in the fed. you don't have to be really smart with numbers. that's about all i take with me. >> are you suggesting they're not looking at the numbers? >> they're looking at the numbers -- >> they're making the numbers up. >> i think i'm going to hire. i think, yeah, yeah, i think today i'm going to hire and i heard some guys down the street say things looked good for them. it's about the weather. it's about whether or not once we get through the weather we will find out that businesses will stop giving out dividends or buying other companies and maybe they'll actually invest in hiring people. that's what we got to see when the weather changes. >> susan, what does all of this mean to the market? we've been giving the economy a pass because we're putting everything on the weather. can the stock market go higher if the weather continues to get blamed? >> well, i think that mother

nature has a plan for us, and it's called spring. so i don't think that we have to worry much about a great deal more snow. i do think that the weather is going to impact the numbers for this quarter, and that will. now, the fact is that people buy on rumor and sell on fact, so when the numbers começ out, we may watch the market move back because it's got facts that it already knew it was going to have. >> now, david, i want to go back to something that came out on march 3rd. the numbers in terms of what the u.s. consumer was doing in january. i think it's kind of illuminating. spending on utilities in real terms jumped $22 billion at an annualized pace. the increase we did see for consumer spending during the month, almost all of that was implicitly on obamacare.

in other words, on the affo affordable care act. what part of that points to fundamental strength of the u.s. consumer and what are you buying here in the market? >> well, there's certainly spending on obamacare, the affordable health care act, as everyone grapples, individuals, businesses grapple with what that means to their bottom line and what it means to their pocketbook. but, you know, we have seen consumer spending has been fairly strong. in terms of what we're doing in the financial markets though, you know, we're talking a lot about the weather. steve's comment about the beige book. but the weather has had an impact. people areç not going to go ou and shop for a car, a home, or refrigerator when there's two or three feet of snow because of the polar vortex, but we know that will subside, the economy will strengthen. we'll see it in the data for april and may. so we think that industrials, cyclicals, technology, financials are all attractive

this year. we don't expect a year like last year. it will be more modest returns with volatility along the way like we've seen, but we're bullish on the stock market. we believe we're at a secular bull market for stocks and a secular bear market for bonds that started last may. >> kelly, that's what makes the -- i didn't quite get the first guest's comments on this. the market is in the middle of a trade, and that trade is that the weather has had a huge impact. something comes along to confirm that trade and i think it's important for the market to know that, and the beige book -- it's not scientifically gathered, but it's a pretty broad cross section of the economy, and i think the fed is talking pretty important employers, manufacturers, and companies out there. so i wouldn't throw it away. >> nathan? >> i don't doubt what you're saying but the survey i really would believe would be gallup which came out and said february hiring was up.ç now, we believe -- >> it's not -- >> i just think, frankly, there are too many numbers in this

group and that we have so many numbers in this soup that it's very hard to make -- >> i have heard them all. >> which one then should we focus on? >> policy. >> the weather is like the dog ate my homework. sooner or later you have to get down to fundamentals. there are a lot of businesses that are dealing with it. i think they've got good deals, good consumers, and good products. that never goes out of style if you want to buy it. the fed, forget about the fed. >> if you can't get there to buy it, it goes out of style. >> a short-term aberration. >> you're selling this market because we don't believe the weakness is accurate. put your money where your mouth is. >> one at a time. >> don't tell me to put my money where my mouth is. we've been in this market the whole time. i'm short tesla, waiting for it to break. >> steve liesman's point -- >> i think you're both silly. >> go ahead, david.

>> steve liesman's point is if the report is pointing to weather, there's some accuracy in that.aid çearlier. if we have weak economic data, we know that the weather has an impact and we're going to see stronger economic data as we get into spring. but right now the market -- >> if we don't -- >> the market -- >> what i want to know -- rick's important point was did you ever hear of seasonal adjustments? yes. what's happening in my opinion is the weather we have had has been overwhelming the seasonals. when you get things like snow in atlanta, the seasonal is incapable of picking it up because they don't expect it. >> in southern michigan -- >> georgia is a great state but i'm sorry gong gdp is going the way of atlanta. >> bingo, rick. >> i live in the midwest where we do have snow. we actually go to work and if there's a number released from

chicago, even when there's snow. you got that d.c.? and i will tell you, i went off to the restaurant, i bought an appliance, i went looking for a car for my daughter. i'm sorry, i'm not buying it. >> rick, rick -- >> wait a minute. >> rick, rick, i'm in southern michigan -- i'm in the midwest, too. rick, i'm in the midwest, too, and in southern michigqnx nathan is in cincinnati and the weather has an impact. it's having an impact. >> four year low on the service sector. i'm sorry, i'm not buying it. why is it at a four-year low. >> rick -- >> hang on one second. can i just jump in here? look, here is part of the issue and it goes back to the report i mentioned because it's the most comprehensive we have yet. there's a huge spike in the amount people were paying in utility bills. there was definitely an impact

there, and there was a big inkroo he is in the amount consumers were paying for the affordable care act. those two things, one may be -- >> there's a whole lot more wrong with the economy than weather! >> yes, an interesting point, rick. >> rick, the point that kelly is making is that money wasn't going to the high utility bills, it might be going to walmart or might be going -- it's not the weather -- >> an extra $2 a month -- >> let me -- >> a question to susan. >> all of you,ç all of you are fortune tellers in -- you don't know about tomorrow and neither do i. >> i'm making a very simple statement here which is the bull thesis on this market on the economy is that some of the significant headwinds of last year and the year before have abated. when you look forward, you're right, susan, it's very hard to

tell the future, to tell which which things are going especially when you're talking about the future. the point is when you look at the headwinds to the economy, they have abated and maybe now there are more tailwinds. that's the thesis on economic growth -- >> and i would -- >> i would concur with that. >> how about this? if rick is right, there's no reason for the stock market to be hitting new highs every day. if rick is wrong -- >> it's called bad programs and we're going to end the tina thing real quick. i just don't know when. >> nathan -- >> i like -- everybody is ignoring large cap growth. it's the only sector of the market right now that's trading lower than its historical value. %-ponly at 87% of historical pe. >> can we agree on this forecast

for spring? >> world series. >> we're going to go to the beach. i'm going to tell you what we're going to agree with like it or not. susan gets the last word. >> well, thank you very much. we don't think the market is overvalued and we think it's going to have at least single digit growth this year and we're pretty optimistic about america. >> great to see all of you. >> okay. we have about 45 minutes to go. that was fun, right? >> that was lively. >> all right. right now the dow jones industrial average is down 44 points. s&p did hit a new record high earlier. it's down a point or so. kelly. >> going back to the central question, is there still value in this market. coming up, bob olstein has the name of five stocks he thinks are bargains. his funds blew away the market

last year. you done want to miss hpicks. the energy departmentç approving loan guarantees for first new nuclear power plant in years. christine todd whitman tells us whether this is the beginning of a nuclear resurgence in this country. >> and chipotle trying to walk back comments that rising costs associated with climate change could eventually force the company to take guacamole or salsa off the menu. we have a stock brawl coming up. you're watching cnbc, first in business worldwide. for tapping into a wealth of experience. ♪ for access to one of the top wealth management firms in the country. ♪ for a team of financial professionals who provide customized solutions. for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve.

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welcome back. the recent spike in energy prices cooling off a bit today. jackie deangelis has more on what's behind the pullback. >> good afternoon. a couple factors indicating and pressuring crude prices today. we saw about a $2 slide in the west texas intermediate price today. the first issue was the department of energy in a bit of a bearish crude inventory report for last week. 1.4 mildinn barrels, a little more than traders were expecting. also the fears of geopolitical

problems are subsiding a little bit. and last but not least, weakness in equities today. it seems like it was the perfect storm to sell crude and that's what people did. traders saying they expect these prices to stay elevated. there is strong demand domestically and globally for our refined products and that should keep the prices over $100 a barrel. back to you. >> thanks very much. the nuclear regulatory commission recently approving licenses to build two new nuclear reactors. the first new approvals in this country in more than 30 years. critics calling attention to the disaster tistill going on in fukushi fukushima, japan. our next guest says nuclear energy needs to be the future. >> christine todd whitman is co-share of the case energy coalition. >> glad to be with you. >> i understand, you know, the nuclear regulatory commission

approves these first two reactors in three decades. i doubt we could find a single resident of any state however who would approve it beingç in their backyard. so where do we go from here? >> actually, that's not true. there are four reactors being currently under construction in the united states, actually five but one was pda that's been approved before. four new reactors. these are loan guarantees. the first time we have had loan guarantees for two of them. the closer you get to a nuclear reactor, the greater support you have for nuclear. the people in the communities understand what the safety record is of nuclear and the benefits nuclear brings to them and stable utility prices, energy prices, the reliability and the fact that it's the only form of base power that releases no greenhouse gases when it's producing power. the people that know the information, the ones who live the closest, are very pro. >> governor, all the same, there

is one big concern with regard to nuclear and that's the threat of cyber attack. the u.s. perhaps has masterminded some attacks we've seen on facilities in iran. what is to say that can't be turned around? how can we be so sure these plants will be protected from the next generation of;hthreat? >> you can never say never. it's an ongoing battle of cyber attacks, but, frankly, what they will do is not attack a nuclear reactor because you don't get anything. the way you process nuclear energy is not the same way you process nuclear weapons. it will not release into a bomb form. what you want would be you go after the infrastructure. they'd go after the whole energy sector and mess it all up, and we are vulnerable that way, but it doesn't matter what the power source is. they want to knock down the entire system if that's what they're going to do. the nuclear regulatory commission is constantly pushing

for higher levels of -- >> governor, i got to interrupt you. secretary kerry is speaking on the situation in ukraine. we want to listen in. >> all the discussions have taken place with the staff. countries came to paris todayç- a strong commitment. as syria's conflict spills over lebanon's borders and as the refugee crisis grows, we are deeply concerned for the security and sovereignty of the people of lebanon and for their simple ability to be able to chart their own futures and

fulfill the same basic aspirations that they share with everybody else on this planet. the president pulled out and showed me a very dramatic charting that goes for the last few years, four different charts that show you the extraordinary change in lebanon of the numbers of refugees as every year upwards -- the entire country has become a splotch of red instead of red dots. the entire border is really red today because there are almost a million refugees in lebanon. this has an extraordinary impact on the internal dynamics of a country. people who are looking for work, people who work for lecsé it drives wages down, it changes the nature of that nation. so the united states is very proud to have provided lebanon

just in the last year or so with with respect to its development process $340 million the last few years in humanitarian aid, and we will continue to support the lebanese armed forces and other security institutions. of course, you can't talk about the values of sovereignty, security, and determination and economic opportunity without coming quickly back to the events of the last days in ukraine. ukrainians told me yesterday in kiev how desperately they want a government that has the consent of the people and an economy that gives them a chance to be able to live just like everybody else. i told the story of a person who had been to australia who came back and said, we just want to be able to live the way other people live, the way we've seen them live. well, today our fellow foreign

ministers and i met separately with our ukrainian çcounterpar and our russian counterpart foreign minister lavrov and we met as a group also, a group of concerned countries. we agreed to continue intense discussions in the coming days with russia, with the ukrainians in order to see how we can help normalize the situation, stabilize it, and overcome the crisis, and those intentions are intentions that are shared exactly as i have described them between russia, the united states, the european countries, and ukrainians who were here. all parties agreed today that it is important to try and resolve these issues through dialogue.

the united states with our partners is focusing intensely on a remedy, and i don't believe as any of us believe, president obama doesn't believe it, i don't believe the other countries we're working with, i any they don't believe that any of us are served by greaterç o further confrontation, and also we met today to discuss these issues because we cannot and will not allow the integrity of the sovereignty of the country of ukraine to be violated and for those violations to go unanswered. russia's violation of ukraine's kof r sovereignty and territorial integrity has actually united the world in support of the ukrainian people, and this

morning secretary hagel announced that the defense department is taking concrete steps to reassure our nato allies, steps like expanding our aviation detachment in poland and our contributions to nato's baltic air policing mission. this is on top of other steps that the united states has already taken, steps like suspending our bilateral discussions with russia on trade and investment, suspending u.s./russia military engagement, and suspending preparations for the g-8 summit in sochi. now, as i said yesterday inç kv and as president obama has said as well and as i said to foreign minister lavrov today, russia made a choice, and we have clearly stated that we believe it is the wrong choice, that is the choice to move troops into crimea. russia can now choose to

de-escalate this situation, and we are committed to working with russia, and together with our friends and allies in an effort to provide a way for this entire situation to find the road to deescalati deescalation, the united states is ready to work with all parties to make that happen and to make it happen as soon as possible. we renew our call for russia to speak directly with the government of ukraine, to send troops back to their bases, and to welcome international observers and human rights monitors, and we've seen today with what happened with special envoy surrey just how important it is to ensure the safety of those monitors and of those observers. ukraine's territorial integrity must be restored and mustç be respected. from lebanon to ukraine, the united states stands ready to

help our friends in a time of need, and today those needs obviously are great in different places, different kinds of needs in different places. we especially thank our friends here in france for their partnership as we work to address these challenges and many others. for instance, iran's nuclear program. we're working together. violence in the central african republic, we're working together. the pursuit of reconciliation in mali, we are working together. all of these efforts require international koogcooperation, coming together as a community of nations, as we did today, is the best way to resolve these kinds of problems that concern us. and today i believe we initiated a process that over the next couple of days we hope can bring us to that deescalation and to

the path of the protection of the integrity of a country and the building of stronger relationships of other nations. on that note i'd be delighted to ajyrzu%ñ first question comes fm amy guerin of "the washington post." >> thank you. mr. secretary, you just renewed the u.s. call to russia to speak directly to the new ukrainian government. you were hoping that that would happen today, right? here between lavrov and the ukrainian foreign minister who companied you here. what assurance did you get, if any, from the russians that they might be willing to have that kind of conversation in the future? >> well, let me make it absolutely crystal clear, i had no expectation, zero expectation that today that kind of a meeting would take place. i did not expect it, and we did not ask the foreign minister to

come here for that purpose. so the premise of the question is really just not factual in terms of what we were expecting. we brought him here because we knew that it was inappropriate for us to have discussions with minister lavrov whom i knew i had a meeting with without being able to consult with our ukrainian friends, ine it would have been inappropriate for us to come here to paris and for a group of nations to join together and make some kind of an agreement without the appropriate consultation and engagement and involvement and sign-off from the people who are concerned. this is a ukrainian decision, and we respect that. so we met, all of us as a group of foreign ministers, with the foreign minister from ukraine. we went through the things that we had discussed today. we solicited opinion.

i will be in touch later tonight with the foreign minister as well as with the prime minister of ukraine. they're traveling to brussels for meetings tomorrow with the eu, and we will continue that discussion. i will also continue the discussion with foreign minister lavrov in rome tomorrow. foreign minister lavrov will then return to have discussions with president putin, which he also did today. he will continue to have that discussion, and i will obviously have an opportunity to have a discussion with president obama and with the team in the white house in order to discuss the road çforward. but we had very thorough discussions today, very extensi extensive, exchanged ideas. we both have thoughts to take back to our capitals and to our respective bosses, and i intend to do that with hopes, with hopes that the ideas that have been put on the table today can

lead us to that place of deescalation that i talked about. >> all right. that's the secretary of state on the ongoing situation in the ukraine. john kerry saying the u.s. is ready to work with all parties to, in his words, de-escalate the situation there, that he remains deeply concerned about a potential refugee crisis, and that he, in his words, is trying to normalize and stabilize the crisis. all parties agreeing, he said, to resolve the issue through dialogue. the secretary having a meeting today with his russian counterpart, sergei lavrov, in paris, and that this news conference coming after that meeting. john harwood with the reaction now. and, john, this certainly has a much more diplomatic tone at least from john kerry's mouth. >> exactly. we haven't heard from sergei lavrov, the russian foreign minister, but the point you made, the relevant çmade, is t apt one. that is that secretary kerry came out of these meetings saying everyone wanted to

resolve these through dialogue and we will have intensive discussions going forward. there was no indication that the united states was sensing any escalation of the situation. now is the time to try to persuade russia to take that off-ramp that u.s. officials have been trying to put in front of it, and we'll see whether that happens. but i think people have to take it as a hopeful sign that at least it's not -- does not appear from secretary kerry's statements that it's getting worse and that we're on a diplomatic track now for at least the time being. >> john harwood, thanks very much. john, the markets by the way interpreting it largely the same way with the dow up a little bit from where we are before the remarks. off 40 points. still after yesterday's sharp gains, the s&p 500 ever so slightly lower. the nasdaq still hanging onto the green here. >> get ready to go bargain shopping. the famed fund manager bob olstein. he's talking about the high flying social media sector. and guess what? he's not impressed. get your pens and paper ready

because mr. olstein is next. and united airlines cracking down on carry-ons forcing passengers to pay for bags they say are too big toç bring on t plane even if they fit in the above compartment. the mo of is to ensure all passengers have space for items. we want to know whether you're buying it or whether it's rm just about the profits. tweet us your best responses coming up. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer.

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welcome back. strong gains yesterday, headlines about new highs, and today we're largely holding in place. so you could call it perhaps consolidation, the s&p giving up only a point. if it does turn green, we will be closing a tt another record high. some slight declines in the dow with exxon in particular wearing there. the nasdaq is still green as we head into the final half hour of trade. the marketsç posting monster gains hovering near record highs.

link edin and twitter. our next guest is bob olstein, chairman and chief investment officer. his fund finished 2013 up more than 32% handily outperforming the s&p 500. bob, congrats on that performance and great to have you here. thanks for coming on. >> thank you, scott. >> this intro to you we read no social media stocks. why not? why not facebook? why not some of these names? >> these stocks all have negative free cash flow. we understand the promises tomorrow. in 1999 and 2000 they looked at cliques a

clicks and revenue growth. 10% of these stocks make it. the other 90% doesn't. it reminds me of cisco which did make it butç in the last 15 years, if you had done everything right, you lost more than 60% of your money. we prefer to look at free cash flow. all the performances in the social media, it's sales force.coms, we prefer to go to the johnson & johnsons and our shareholders are not complaining about our returns. >> i bet they're not. >> bob, for those people who are looking at this market near record highs, looking at some social media high flyers and saying what should i do in this market? your advice is to zero in on high cap value names. explain why. >> it's not large cap value. we don't pick positions by their height. we don't pick companies by their size. we're finding a lot of values in that area but there are values in other areas. for example, johnson & johnson, which has been in the penalty

box because of all of the problems they had in the last three to five years, not only in the drug division but their instrument division. they had trouble with their tylenols, et cetera, here is a company that's got it back on track. they probably have earnings power of over $6 a share. it's growing at 5% -- 4% to 5%. notç growing like linkedin, bu they're producing free cash flow. something most people don't understand. and here is a company that we think is worth $112 a share. that's at an 18 multiple to the $6-plus they're going to earn and here is a dividend of 2.8% and those are the boring names we're dealing with. a dupont, which is now a farming company. it's no longer a chemical company. $5 of excess cash flow. 3% dividend. they're giving these stocks away. why should i pay $27 billion for twitter that might not be in three years? >> pepsi is certainly not boring. most notably perhaps because of

nelson peltz arguing that pepsi should split into two divisions, a snack food and beverages and he said that would unlock even more value, the type of value i presume you'd like to see in this name. do you support mr. pelts's plan? >> i support mr. pelts because he sees value. 's value player, mr. peltz. here is a company that could earn $6 a share. everybody is concerned about the carbonated soda in north america. it's 20% or a little less of the entire company.jd8the smanacks key. we think pepsico again, 3% dividend. i like the bet. long-term performers are the people who make the fewest mistakes, not the one that picks one or two winners and then they're there holing the bag when they let the air out of twitter and linkedin. >> it sounds like you would buy

pepsi here even if there's no prospect of that splat. >> absolutely. >> just curious, you are a guy looking and dealing a lot of times with activists moving in and out of names. there's the carl icahn debate in the ebay stock, of course. what is your take on this? do you view these guys on unlocking value and fighting corporate boards to do what's right for shareholders or are they just after their own, quote, unquote, short-term interests? >> i think both. carl icahn made a comment about apple. he was right on. i think they made a mistake, and we own apple. we have owned it since $55 a share, by the way. i think they made a mistakes in terms of they should have bought back their stock. they would have gotten a 10% yield rather than giving a 3% yield. icahn is saying this is about we own ebay, too. i would rather own ebay than an zon. at least ebay produces free cash flow. >> warren buffett made this point on our channel on monday

when he was asked the same question, he said, look, ultimately, you want those businesses that are going to have higher earnings power long term, not necessarily the ones that are just doing a big buyback right now even if that makes economic sense. >> apple is earning $45 a share, has $75 to $100 a share in cash and the fact they may only grow at 3% a share, why should i care? the fantasy of linkedin, netflix, amazon, they're all good companies but they're not worth what they're selling for. i'm not worried. so icahn, who is talking about apple and basically talking about these other companies, he is a value player really. does he have self interest? so do i have self interest. i want to make my shareholders money and this is where you can with the risk out there rather than going out. i admit the social network is where you made the most money but watch out when they let the

air out of the balloon. >> all right. bob, it's great to hear from ç you, as always. >> thank you, scott. >> great to see you. >> thank you, kelly. we've got 15 minutes to go into the close here. dow sitting around levels where we started the hour, off 40 points. again, that would be giving up some of yesterday's gains. exxon in particular is hammered today. the financials are strong. goldmans is having a good day. the s&p 500 is off a point and the nasdaq is still slightly possible. >> billions of aid on the way to ukraine. but is there a strong possibility that a lot of that money will end up in the hands of vladimir putin? that outrageous story is coming up next. and after the bell, chicagoland feeling a little more like a junkyard these days with the city's bonds getting thrown on the scrap heap by moody's. a look at the impact on the windy city and the bond market and whether you should be playing in the municipal bond space. keep it right here. mine was earned in korea in 1953.

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welcome back. united states joining with other western powers to increase pressure on russia to talk to ukraine's new government in a bid to ease tensions over russia's military intervention. >> the obama administration and the european union are letting

aid packages to ukraine, but billions of those dollars could actually end up in russia. michelle caruso-cabrera, our chief international correspondent, just back from ukraine explains. michelle? >> hey, scott. thee u says they have $15 billion ready to go. the u.s. $1 billion in loan guarantees. at least $2 billion, perhaps as much as $4 billion likely almost a direct transfer to russia. the reason, natural gas. they supply the vast majority of ukraine's energy. the ukraine hasn't been paying the bill. we have an outstanding bill of $2 billion. according to reports, thee u energy minister went so far as to say that paying the russians for that energy was a priority. every month that goes by, they need to shell out roughly a half a billion for energy. the money that ukraine borrow was the guarantees is supposed to be used to help subsidize poor ukrainians who are going tç

face higher natural gas prices. the ukraine is supposed to stop subsidizing energy for the entire population which it does now. money that pays for energy is almost a direct transfer to russia. finally, the ukrainian and russian economies are deeply intertwi intertwined. anything that pops up ukraine often ends up helping out russia, too. scott, kelly? >> thank you so much. we have about ten minutes to go before the closing bell rings. the dow has really been just hanging around that down 40 for about the last half hour at least. >> and all this as investors, traders, scott, know this isn't going to be the last week you hear about russia. it's not going to be the last we hear about ukraine and nevertheless, indexes here are nearly at new all-time highs at least for the s&p 500. >> s&p is only down a point and it's largely been there for the duration as well. >> if we close positive, if that arrow turns green towards the end of the session, that will be another record high. 12 minutes to go. united doesn't seem to like

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welcome back. there's how it looks with a few minutes to go. the dow right now down 35. the nasdaq is positive but the s&p is fighting it out. joining us now is jordan waxman a partner at hightower hsw advisers. what do you make of today relative to what happened monday and tuesday? >> could have been a bigger down day, it wasn't that bad. less than 1% on the downside. any whiff of good news created buying opportunities. every dip is being bought. today is just a little bit of the adp numbers weren't strong enough to push the market higher. >> yesterday told you it is dangerous to be short this market right now. >> i agree and try being short the momentum names. anybody who is short the momentum names is getting killed. >> the best buys, çteslas, there's a good handful of stocks that good luck trying to get in

front of those. >> it reminds me of the late '90s when you had anything that started with optical network -- >> you're scaring me when you talk like that? are we in a bubble? >> parts of the market are bubbly. what's being left behind, a margin of safety in many areas of the market. you can avoid the go-go stocks, the utilities and the slower growth stuff. >> what looks attractive to you right now? >> industrials look good. cyclicals still are reasonable valuation. the energy patch really hasn't moved. i'd say mlps are fairly valued but some of them are growing 15% to 20% per year. >> what about the banks? everybody is hoping the banks will finally get going. interest rates creeping up, isn't that good for the banks. >> i asked my partner if there was a toy company that admitted to buying lead paint in companies, would you buy the company? the banks have already admitted

that they're nefarious. i wouldn't put a dime into the banks. >> good to see you. up next, we're back with the closing countdown. after the bell, the woman at thç heart of the irs scandal called back to testify and let's just say it didn't go that well. >> on the advice of my counsel i respectfully exercise my fifth amendment right and decline to answer that question. my fifth amendment right. my fifth amendment right. my fifth amendment right. my fifth amendment right. my fifth amendment right. my fifth amendment right. my fifth amendment right. >> that wasn't even the best part. two lawmakers had a shouting match over that. a full report on that incident and what steps are being take ton find out who lois lerner won't disclose. with bayer back and body.

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a research tool on thinkorswim. from td ameritrade. there you go. the floor of the new york stock exchange for the closing count down. it's been a choppy day. maybe the tengts tensions are easing just a bit in the ukraine. you have secretary kerry saying a little earlier that both he and his russian counterpart hoping to solve this crisis through dialogue. bob pisani has been on the floor all day. off big down day on monday, tremendous up day on tuesday. now we're trying to figure out where we're going to go from here. >> very narrow trading range. sideways most of the day.ç narrow range in the dow, 50, 60

points. i just want to show you bank of america, folks, from the last two days, we're getting strength in financials. this stock was up 2%. >> finally. >> yesterday. 3% today. this, scott, other than pfizer, these are the two most active stock. >> guys on the desk every day on the halftime show saying when are the financialing goninancia going. >> here are the major financials. sorry to keep moving around. nice moves up in all of the big names. the big point about today other than the financials move up is basically the fed came out and confirmed severe weather impacting -- >> they said it more than 100 times. >> do you get the point here? basically february is done. it doesn't matter what anybody says about february. nobody is care being it. ism services week. nobody cares. >> the question is will they care some friday when it's the actual jobs report? >> here is my thoughts on this. number one, if the number is

bad, they're going to say weather. if the number is good they're going to say there's a ray of light, it will move the markets up. my point is the momentum is still to the upside in the stock market. they'll makeç excuses if it's bad. if it's good, they'll say rays of light. >> that the teflon word described about this market. save for a 5%, or 6% pullback we haven't had the big one and the snap backs are quick and severe. >> here is my real concern. i'm not sure we're going to get a clean series of economic data for several months now. we had better pray march finally cleans up a little bit or things are going to be murky now for several months. >> the snapback potential can make things even more murky. >> that's what we need. i would like to see -- let's stop with the weather. let's get some clean economic numbers. right now i'm just happy to see the financials breaking out. >> that's the thing everybody is going to be looking to, the jobs

report. thank you. >> pleasure. >> interesting day here. again, the s&p briefly hitting that record high and then going back to the flat line. the dow jones is going to go out down 30 or so points. that's it for this hour. kelly evans picks it up for the second hour of "the closing bell" right now. to bell." i'm kelly evans, and a mixed day for wall street following yesterday's huge rally. take a look at the s&p 500, ladies and gentlemen, because it looks like with a teeny tiny little gain of 0.05 points, we may have set another record high for this index. it only took a green arrow today. we might have gotten it there at the end. the nasdaq adding 6 points. the outperformer, while the dow down 30 weighed down by weakness in exxon. we have to talk about the financials. let's get to it with today's panel. cnbc contributor carol roth,

eamon javers and sara eisen and "fast money" contribute, dr. john jon najari najarian, and tim seymour. dr. j, first to you. what about the action? another record high it looks like for the s&p here. >> and hardly any giveback at all. of course, we took back much more than we gave monday yesterday, and then today to see it just continue on its way. as i said on "halftime," i can think of 3.9 billion reasons why at -- 3.9 trillion, i apologize, with a "t," not a "b." that money is going to have to go somewherdç and everybody knos it. that's another hand other than just the fed under the market. >> eamon, what do you think? >> look, the proposals are just that, proposals. nobody expects this to go into law as it's laid out here. the idea is the president is laying out a political wish list. it will have to work through

congress. if you're in the markets right now, don't react too much to what's out there as a proposal now because what translates into the real world might be very, very different. >> tim, just as soon as i'm getting excited about a squeaker of the gain higher, now it's looking like a red arrow. i understand whether it's 0.05 to the upside or downside probably doesn't matter a whole lot. what does matter in your opinion here? >> i think the markets traded great when you consider we may have euphoria off of yesterday's bounceback rally. but look around the world today. eu pmi services were at highs back to june of 2011. even china, which people love to pooh-pooh had pmis in the nonmanufacturing that are 26-month expansion. the rest of the world is doing their part here, and i think when we're at a time when u.s. markets are at all-time highs we're going into a season period where people are starting to get ready for some april and may nervousness. i think markets traded grest today and i'll take that.

>> what about that sara? >> i love tim for bringing up the rest of the world because that's an important story. you have an ecb meeting tomorrow where the ecb has pressure on it. you saw weaker euro today, to try to do something to stimulate and get rid of the super low inflation threatening deflation. whether mario draghi will hackett or no, there's a belief you will expect easy policy out of europe. when you talk about the markets, coming up on the fifth anniversary -- >> of our oun bottwn bottom. >> you look at the defining factor of the rally, it's the federal reserve and all the other qe. >> what's amazing is we're reacting to all of the good news, anything that's good, everybody is jumping on, and anything that's bad, everyone is sort of putting it to the side. it's the weather, we have some sort of explanation for it. >> right. >> and i look to the bond market, and i just don't really feel like if you look at the yield where the ten-year is

right now, that the guys in the bond market aren't really buying it. i'm seeing some structural weaknesses. so i think you have a little bifurcation. there's a lot of euphoria going on but there are some of us that live in reality and structurally understand that not everything is as rosy as it seems. >> this is the same point kevin was making on the program yesterday. he said, you know, mr. wonderful, mr. america, but he said i don't like that 30-year. i don't like the fact that the yield is as low as it is, dr. j. would you agree there are some mixed signals in this market? >> well, i think that there certainly are a lot of folks around the world who are willing to put money into our treasuries whether it's yen, whether it's you're euros, whatever it is, into our treasuries at these yields which means we may not 3.5% as quickly as people said. >> and we could still be fumly okay. >> exactly. and look at what we're up on the year now. it's not like we're off to the races, we're up 18% in the first 2 1/2 months of the year. we're not. i mean, we basically had to

fight our way back from an 8% decline in the dow and a 6% decline in the s&p. >> we did that really quickly. >> we always do. i mean, i think there are people who are just willing to buy, but i don't view it as euphoric at all. >> eamon? >> you talk about treasuries and what's amazing to me is the real world impact of that, i was talking to a mortgage lender on monday who said you wouldn't believe this ukrainian crisis is pushing a lot of people into treasuries, it's bringing interest rates down. what i can do for customers is different and better than what i could do for customers last week. it's actually having an impact on real human beings in this economy trying to buy and sell things. >> we saw a bit of a bounce back this morning. the mortgage application data still low, pressure on employment in that industry. but 4.5% of the 30 year fixed mortgage, that's going to help a little bit. let's get another voice. nathan bachrach rejoins us from

earlier in the hour. what we've learned is this is a teflon market. >> is this a teflon market? does rick santelli like to scream? do bears hibernate in the woods? i could go on and on. >> it is a teflon market and you have a market that in the last 12 months has only gone down 6%. you have to say to yourself, something else is going on. in fact, i think we have a new philosophy which is called sell on the troop deployment and then buy when they go back into the barracks. we're looking at things in an entirely different things. what carol said is critical. when we went down to 2.6% on the ten-year, that was a time when everybody out there could change the duration orç amount of flu wation they were going to have. i predict you will see -- we said this last week -- when you start to see the economy get numbers without the weather, you will start to see it grow and we will look back going the good old days of 2.6% on the

treasury. >> sara? >> is that a classic nathan bull market mentality where you can shake off the bad news and climb back up? you have been through enough bull markets in your life. the question is what does it take to break it? we didn't even see a correction during the january volatility -- >> i'll tell what you breaks it. in 2008 we started hoarding cash because everybody was fregeing out and throwing away any company that didn't have any value to their big conglomerate. then we started growing cash and then companies started giving dividends. now we're seeing mergers and acquisitions. if i can't buy my old stock, i'll buy somebody else's. then companies will start hiring as they get demand and that's going to be the fourth stage and that's when we'll get stability and that's, unfortunately, when the retail investor will come in and the least amount of growth is likely to occur. >> sounds like we have another 12 months to go. >> exactly. 12 months and we're done. >> 12 months and we're done? >> not done but 12 months we actually might be able to predict that the data will be something we can depend upon. remember when we usedç to --

>> to be clear are you saying 12 months until we get to the point of sustaining expansion or 12 months until the lights are out. . >> 12 to 18 months out values start to stabilize. when things are more predictable there is less opportunity. >> a little bit like a disney fairytale here and i think when you talk about the teflon market, i think the teflon is coating over some cracks. i think the consumer is still very weak. we have far too many people who are unemployed and underemployed. we have a ton of debt. we will talk later about all the unfund eed pension liabilities that nobody has started to talk about. and from a broader international perspective all this central bank activity i don't necessarily see as a good thing. i don't think we can print our way out of this without any consequence. >> you have been wrong though. if you missed the market you haven't been on this rally. you have been pointing to the

wall -- >> i agree. that's why i'm saying i'm realistic, you can't fight it right now but at some point i think there's some real concerns in terms of fundamental structure. >> retail investor got out of the market and sold $40 billion of stock and etfs at the end of january, beginning of february. in terms ofç timing and opportunity, the retail investor always seems to be getting it wrong. when it's finally recognizable that's when we will get stability or a correction. >> we saw this thing yesterday kind of like a putin rally where the markets rallied on the idea that vladimir putin wasn't going to invade any more countries or at least the rest of any more countries. i wonder how much the market trusts vladimir putin -- >> this is a great point. >> people seem to digest them and rally on them. last week he was doing something very, very different. how stable does the market think that situation is or is it looking for an excuse to rally? >> there's also michael black out there who is saying what we learned yesterday is the markets are taking putin at his word.

is that a trade you really want to be taking? >> that's a danger. >> i don't think it is. i think if you see the headlines today, there's a lot of concerns that russia is going to continue to try their luck in different parts of the region. there's a referendum vote you have to watch that's going to be in ukraine and in crimea over the next couple days. that is going to give you an idea what putin can do. and then switching to china really quickly because the journal -- >> real quick. >> the whole thing about china is going to blow up in this credit market, i actually think that the news coming out of china means that they are and the fearmongering on china is another one of these red herrings for this market. >> all right. we'll definitely talk more about that one in the days ahead. thanks everybody. stick around and catch tim seymour coming up on "fast money" at 5:00 p.m. just under an hour's time. much more coming up here on markets and the economy ahead of friday's closely watched jobs report. bob nardelli says he isn't sold on this economy either but he also contends there's more we can do to spur growth. he has some ideas and he'll

share them next. plus -- >> oon the advion the advice of counsel i respectfully exercise my fifth amendment right. my fifth amendment right. my fifth amendment right. >> that was former internal revenue service official lois lerner on a congressional hearing. and then two lawmakers got into a pretty big argument. all the antics in one report that's just ahead. [ male announcer ] we know they're out there. you can't always see them. but it's our job to find them. the answers. the solutions. the innovations.

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welcome back. so mixed market todayç after those big gains yesterday. sheila dharmarajan, what was the theme? >> safeway moving higher in a "wall street journal" report that kroger is looking into a bid of its own for the grocery chain. now, this could slow down plans -- kroger is also moving higher on the news. target moving lower as the chief information officer resigned in the aftermath of the company's massive data breach last year. moving on to health care, eli lilly losing ground after the fda declined to approve its experimental diabetes drug citing deficiencies in the plant where it would be produced. good news. it was a great day for the

financials, the leading sector in the s&p 500. bank of america, goldman sachs, morgan stanley, and jpmorgan all to the upside. >> and bank of america's case, strongly so. in today's report on the economy known as the beige book, it included 119 mentions of the word weather. ten times more than the amount a year earlier. according to my next guest that's just another reason to worry about our economy. joining me now, former home depot ceo bob nardelli. >> great to be here. we're allç becoming meteorologists. >> aren't we? what does it tell us about how strong the u.s. economy is or isn't? >> i think we're all looking for reasons to try to explain some of the ups and downs and weather is always very convenient in all the businesses i have been in from construction equipment, agriculture -- >> some of the most weather sensitive businesses, include autos. >> including autos. auto was a little flat last month except for nissan and

chrysler. they had a nice little bounce. one of the things we saw in a recent survey conducted by ernest and young. people that are getting loans or cars are up $100. we're falling back into a little bit of history about getting extended. >> i'm so glad you raise this point. we were talking about it with phil lebeau yesterday. are we at the point where autos are the new subprime housing story from the last cycle? should we be worried about some of the trends? >> i don't think it will be the housing. i think there's a lot more control in place. i think there's a lot more diligence, a lot more vetting of the individuals that are going out for those loans, but it is interesting to see year-over-year that they've gone up. >> and i heard people say in defense of autos, well, at least i can live inç my car. i could never drive my house. i don't know how encouraging -- >> that's a little stretch. i am encouraged that autos -- when i was running chrysler, we went from a 17 million --

>> annualized rate of auto production. >> i'm glad to see that coming back. housing, a little softness on price and volume last month, but all of the supply companies seem to be doing well. i think it's spotty. you have some sectors that are very strong. certainly today we saw banking. glad to see the market come back after the issue the other day. it was a nice little bounce back and so you've got a little bit of a mixed view out there on the economy. >> you've been through several business cycles. where are we in the current one and where do you see opportunities? >> i see a lot of opportunity out there. we were talking earlier about continually driving productivity and efficiencies. i think, you know, you innovate or you evaporate, and i think just when, you know, people get comfortable and have success, that's what breeds complacency in my experience, and so we've got to keep the momentum going out there. but, you know, the deals i'm seeing in private equity, for example, in my business, there's still a lot of opportunity, a

lot of family businesses that want to tryç to monetize, but t they want to stay in the game. so i like those type of deals. >> explain how you can help in that situation. >> well, what we do is we bring capital and we bring additional operating expertise. a lot of the families, they know what they know, but they haven't been exposed to some of the better technologies, whether it be in quality, looking at inventory control, working capital, et cetera, cash management is a big one that sometimes these families really don't have an appreciation of until it hits them. >> right. and they realize what they should have been doing. >> yes. >> you raise private equity. that's a hot button issue in washington right now. a lot of people say this is an industry that only exists because it takesed a advantage of certain parts of the tax code. kf private equity survive especially if there is significant reform coming out of washington? >> i think in general private equity gets a bad wrap.

i have been on both sides. if you go back and look at the numbers and the jobs and the companies that private equity had saved, it is significant, kelly, and i don't think private equity gets the benefit of saving company, saving jobs, anç returning them to prosperity so that they can either ipo or they become an important part of a strategic acquisition. >> because all the same people will say that's great that you're helping to make, you know, these companies more efficient, perhaps help them innovate in some cases. why is it that the gains that you make in a compensation model that is the envy of most industries, why is it that you should be able to get a lower tack rate on those gain that is you don't have to pay the income tax rates that most of the people would? >> my point of view on that is most of the senior private equity guys i talk to, you know, if the laws were to change, that's okay. >> really? >> i don't think you'd hear a lot of them out there lobbying

and pounding the table to retain those. if the law changes, it is what it is. i think these are really patriots. i think these are well educated, ambitious individuals, male, female, and so i think that part of the wrap that private equity get is a little bit of a misnomer and it tends to sensationalize private equity as opposed to the core value it is brings to this economy. >> do you think this means mitt romney can still be president? >> oh, geez, i don't know. how many times is theç charm i guess, i don't know. >> exactly. you can't help but hear people who like to put the dark horse talk out there even though he said no way, even though we haven't even gotten to 2014 yet. >> yeah, it's starting earlier and earlier every election cycle, isn't it? if you look at both parties and they're all being a little coy about i'm not running but i'm out kind of campaigning and stumping. it will be interesting to see the titans that finally come to bear in this election. >> last question, if there was

one area to watch, whether it was related to the election cycle or the business cycle for our viewers right now, what should it be? >> i think what we want to do is keep an eye on the gdp. i think we have to get that gdp up because it tends to pull everything with kelly, as you know. you can't just create jobs without having a stronger economy. the stronger economy helps fuel the tax burden, helps fuel some of the deficit. if there are things we can do in the administration, the old politics over policy, i think certainly in energy, certainly in several other key areas if we had a better view on policy versus politics, i think we'd see some more robustness. you look at the jobs that are created out of energy and the fracking business, you know, the average employee in theç marcellus, $95,000 a year. 1.3 million jobs, $63 billion in additional tacks. energy independence is at the heart of getting this gdp up and

running. >> growth cures all evil. it's great to see you. >> thank you for the opportunity. >> really appreciate it. we have some breaking news now. bertha coombs, what can you tell us? >> the white house says it's going to allow -- to extend the current customers in the transitional plan yaal plans fo two years. 1.5 million individuals and small businesses. they will be renewable through 2016. also boosting 2015 deductibles and out of pocket costs by 4% and they're extending the open enrollment period for an extra month next year to february 15th. now, the white house deflected questions about the timing of this, whether it's political, although in its release it does thank several democrats who happen to be in tightly contested races this year for providing input. back to you. >> just so happens. just so happens. thanks. chicago's credit rating downgraded by moody's. we'll get reaction next.

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john miller joins me now. you're a big manager of municipal bonds, are you not? >> absolutely. we're seeing better trends in terms of investor demand, fund flows, supply is moderate. overall credit conditions are actually improving. we always have event driven and headline driven issues such as chicago, but we are constructive on the market as a whole. >> i could understand in the case of puerto rico for example why that's idiosyncratic or perhaps that wouldn't necessarily reverberate throughout the municipal bond space, but chicago. one of the country's biggest cities and bail just an extreme example of the problems that a lot of municipalities have. so why shouldn't people be concerned longer term about the value of their municipal debt? >> i think moody's today is highlighting a very important issue and chicago has its challenges ahead. jt)(p't gap in pension underfunding, and that gap legally has to be closed over time starting in 2015 which would create a big hole in the deficit next year if they didn't close it.

they are still b aa-1. that's a high investment grade rating. they have diverse economy, growing revenues. this is a political problem in part. we're somewhat hopeful the politics will play out such that they get the reforms in place they need. >> i want to bring the panel in on this as well and ask whether municipal debt here, guys, sounds like an investment for those granted with some risk appetite perhaps, where people see opportunity right now? >> kelly, i would like to jump in here as somebody who is from chicago and from the great state of illinois that's having problems not only at the municipal level but at the state level and i think you have to be really particular about the management of the state and of these municipalities. in chicago there is really no way that they're going to be able to close the gap. the gap is so large and the structure is so broken, when you have not just the pension contribution but a lot of the health care is also significantly underfunded, i think nationwide it's only like

6% of the health care problems that are funded, you really need to look at that and theç structure. so many of these defined benefit versus defined contribution structures you will never be able to make up the gap. i think that's something you need to look at. certain cities and certain municipalities have it down right. a place like chicago and certainly on a broader scale illinois does not. >> what do you do, john? what is the investment answer to the problems carol just laid out? >> that's a very -- those are very important issues. we don't disagree with the broad brush themes you brought up. however, there are some significant trends in the positive area in terms of the essential service infrastructure, revenue bonds that have very solid coverage. the state as a whole actually is generating new all time high record revenues when you combine the 50 states. it's 16 quarters in a row of new increases in revenues.

when it comes to the general obligation sector at the local level, you're right, there's a diverse array of planning and preparedness for growing obligations, and they do need to be looked at one at a time. >> dr.j, were you going to say something? >> i was going to say, of course, that people are still scrambling for yield in places like that. so despite -- carol is absolutely right, people should be looking at it and pulling out a magnifying glass and reading the fine print. however, a lot of folks aren't doing that, they're just grabbing these things because it has -- >> i have a question about that and maybe you can address this. if you look at the fund flows from muni bonds, last year was one of the worst years for munis in a long time. puerto rico partly to blame, some of the other problems, also detroit. what is so different about this year that we've seen inflows into muni bond funds and you are optimistic about that we didn't have last year? >> sure. the second half of last year was actually the worst outflows that the industry had ever seen, and

it was really a confluence, a combination of interest rates, then puerto rico headlines, detroit headlines, et cetera. this year does see a shift. first of all, it rates have adjusted. they look a little more range bound this year. municipal interest rates are higher than most taxable interest rates yet they are tax exempt and there is a need for tax exempt income out there. municipalities overall are actually reducing their total amount of indebtedness this year for the fourth year in a row because more bonds are maturing and getting called than what is actually being issued. pso those are generating some more stability in pricing but municipals are still cheaper than taxables and they're tax exempt. >> thank you for your time. a lot of people are talking about it. people are also talking about national security. it's not often that protecting our energy infrastructure is part of the equation, but michael chertoff, former secretary of homeland security, is looking to change that.

next, he's coming up, and we'll give his take on cyber security and what can be done to step that up as well. keep it right here. cnbc will be back after a short break. you want a loan to build a factory in america? you can't do that. nobody builds factories in the us anymore... you can't do that. using american raw materials makes no sense... you can't do that. you want to hire workers here in the states? they're too expensive, you can't do that. fortunately we didn't listen to the experts. at weathertech we built american factories, we use american raw materials and we hire american workers. weathertech.com,

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welcome back. cnbc is at a major energy conference in houston. sharon epperson is down there, and she now is joined by michael chertoff. he, of course, the former secretary of the department of homeland security there to talk about protecting our energy grids from cyber attacks. also, our resident security expert eamon javers is joining us for this discussion.ç sharon, please kick things off. >> let me start by saying michael chertoff is now the chairman and the co-founder of the chertoff group, a global risk management and security advisory firm, and in our session earlier today we were talking to someone who brought up the fact that the majority of cyber attacks in the u.s. is to energy infrastructure. is this a growing rick and what is being done to stop it? >> it is a growing risk and most of the attacks have been on energy infrastructure and that makes sense because there's a lot of value there. there's intellectual property, and there's always the concern that somebody with pad intent

could get into the network and do some damage. >> with so much technology controlling drilling operations and wireless technology as well, that even creates a greater risk. >> anytime things are connected or networked to allow you to sense or control what's going on, there's a potential vulnerability. the good news is many people in the utility sector, the energy sector, do focus on this and there is a lot of attention paid to raising the threshold and making it more difficult to penetrate, but it's a dynamic process, and by the way, it's going to get more complicated as we moveç to the so-called smar grid where there are going to be many, many more nodes that are, coyote, smar quote, smart. >> sharon, and mr. chertoff i wanted to ask you about the financial system. because there are a lot of people looking at the financial firms and wondering and hoping they are making the important investments now to make sure

these systems are not vulnerable to cyber attacks. what can you tell us in terms of your experience in terms of the threat level that we have for our financial systems? >> i can tell you based both on my work in government and since then in the private sector, the financial sector is one that is quite sophisticated and invests quite a bit with respect to protecting itself. you know there have been sustained denial service attacks against some of the major banks. they've managed to fend those off. we're somewhat more concerned with smaller institutions that may not have as much to invest. but obviously criminals are going to go to banks because that's where the money is. and that's why there has to be not only continued investment but stronger cooperation with the government in terms of warning and in terms of response. >> are you çsaying, mr. cherto, that, in fact, size could be a huge asset for some of our financial institutions if they're the ones that have the ability to invest in the safest

systems? >> well, what i'm saying is financial institutions understand for the most part that they are attractive targets for criminals as well as for people who want to carry out terrorist acts. they have devoted a quite a bit of resource and investment into protecting themselves, but the whole system, of course, is only as strong as the weakest link, and particularly when you deal with smaller institutions that may not be as sophisticated or as well financed, i think there is a concern here that they, too, get a proper amount of attention in terms of cyber security. >> secretary chertoff, you talk about cooperating with the government here, but i got to tell you, i was at a big cyber security conference in san francisco last week. that private sector community is deeply divided in the wake of the snowden disclosures. how much damage do you think has been done in terms of the private sector's willingness to

work with the government by these snowden disclosures? >> i think a lot of what snowden has put out has been çdistorte and some of it i think is incorrect, and it's certainly been wildly exaggerated. here is the bottom line. if the private sector doesn't want to cooperate with the government, there are going to be other governments on the network, the russian government, the chinese government, maybe terrorists, maybe criminals, and i don't think it's going to be very persuasive if there is a sustained attack that a private company didn't want to work with the u.s. government which is, after all, in the business of protecting america. >> michael, let me ask you about the security breaches we've seen in the retail industry lately and, of course, there have been a lot of talk about the smart chip as opposed to the pin operations. there are a lot of coop sumecono are using mobile apps to do their shopping. what impact with i will that have in terms of cyber risk? >> my son works closely with elements of the retail sector,

and i know they are very focused on consumer protection is really priority number one because they understand their business depends on the willingness of consumers to transact business crews using credit cards or over the internet. i think certainly smart cards are a step forward but we have to look at mobile devices which will be the next great advance in terms of payment. and that meansç we have to bui an architecture from the mobile device into the network itself to make sure we protect data and that may involve indescriptioenw you configure the network and house the data. these are issues we have to turn to now before we investor a lot in this new infrastructure. >> thank you so much for being here and joining us here. i'll send it back to you, kelly. >> sharon, great stuff, and we really appreciate mr. chertoff's time. we're not learning very much from lois lerner in the meantime. >> on the advice of my counsel, i respectfully exercise my fifth amendment right and decline to answer that question.

my fifth amendment right. my fifth amendment right. my fifth amendment right. >> the former internal revenue service official repeatedly pleading the fifth at a congressional hearing and the irs targeting scandal. with the details next and find out what was behind a shouting match that erupted between two congressm congressmen. we want to know what you think is driving united's crackdown on oversized carry-on bells, service or profit? your thoughts coming up. understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

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welcome back. former internal revenue official lois lerner repeatedly asserting herç fifth amendment right in hearing and it all went downhill from there. john harwood has the story from washington. john? >> kelly, congressman darrell issa today tried to pump a little air in that controversy over the irs oversight of nonprofit groups. it's been deflated in recent months. you brought lois lerner back, she was the irs official who had previously taken the fifth amendment. she did that again so it produced no new information but it produced one hot political mess. take a look. >> why would you say key party cases were very dangerous? >> on the advice of my counsel -- >> are you still seeking a one-week delay in order to testify? >> on the advice of my counsel -- >> what exactly does that mean? >> on his advice i will decline to answer any question on the subject matter of this hearing. >> i can see no point in going further. i have no expectation that miss

lerner will cooperate with this committee and, therefore -- >> chairman, chairman, i have a statement. i was a procedure question, but mr. chairman, you cannot run a committee like this. you just cannot do this. this is -- we're better than that as a country. we're better than that as a committee. >> you're all free to leave, we're adjourned but the gentleman can ask his question.ç >> i have listened to you for the last 15 or 20 minutes. let at the say what i have to say. before our -- >> thank you. >> i am a member of the congress of the united states of america. i am tired of this. you cannot just have a one-sided investigation. that is absolutely something wrong with that and it's absolutely un-american. >> hear, hear. >> mr. chairman, what are you hiding? >> she's taking the fifth. >> now, it's not clear where this is going to see a matter of governance, if chairman issa is come up with some evidence

indicating this was ordered by the white house. he hasn't done so yet but as a matter of politics it already had an effect this afternoon. the national republican national committee put out a press release attacking one member of congress, a democrat from connecticut, saying she is pleading the fifth just like lois lerner in ignoring the irs scandal. >> i want to get some thoughts from the panel. eamon, how unusual for someone to pull this? >> look, that's shocking video that we just saw from capitol hill. first of all, it's not unusual for somebody to take the fifth before a congressional committee. that happens when people are under investigation as lois lerner is. what is shocking to me though is a long-time congress watcher, i have been up there for 20 years, is aç ranking member having hi mi c cut during a congressional hearing. i have never seen that before. it's astonishing. gives you the sense ever how badly relations are fractured on that committee. >> before we get into that, john harwood, what is the status of investigation that lois lerner is in the middle of? >> does not appear to be going

anywhere. remember, when this came to public light last year, the inspector general had done anss was an administrative screw up, not ordered by the white house. the justice department indicated it was going to do a criminal investigation. no indication that's going anywhere. mostly issa has been flailing around with committee hearings trying to move the ball but he hasn't been able to do it and the thing has fallen off the radar screen. i think this is an effort for him to try to get this thing in the headlines again, and he certainly succeeded although not entirely in the way he wanted to. >> if she's taking the fifth, it's an indication she feels there's something out there that could possibly incriminate her in some kind of a criminal activity -- >> if there were nothing to this -- >> which is always the trouble -- when you plead theç fifth it's all the question you raise but it's a question that's being raised here which is what

is it that she's concerned about coming to light that it could be still out there that we don't know. there's a question with this story, is there some other piece out there that hasn't seen public light yet? >> i think there are two takeaways. the first one is nobody puts mr. cummings in a corner. the second one being that obviously that wasn't a big deal like everybody said and if there wasn't something that she was hiding and was incriminating herself, she wouldn't be taking the fifth. as a taxpayer i have to ask why are we paying for her retirement if she's not even going to be cooperating on this front. >> i suppose the converse of that is why would we not if she's not on the record as having done anything wrong and has not been convicted. >> can i just point out -- guys -- >> we don't want to withhold people's pensions until we know they've been convicted of taxpayer fraud. >> you can't withhold somebody's pension for enacting their constitution rights as a citizen. it's just not possible. >> john? >> guys, we do have a

presumption of innocence in the country. we have not seen any indication, nothing has come to light that has incriminated anybody in this scandal, and so the fact thatç- i don't know what lois lerner's reason is. i could speculate that maybe she thinks this is a congressional committee that is interested principally in harming her in some way, which would not be an unreasonable conclusion, but whatever it is, you can't look at somebody and say, well, they took the fifth, therefore, they're guilty. >> sara? >> i'm just curious, john, from you where the administration is on this? we haven't heard about it in a long time and then it came up again in a fox news interview with president obama. how worried are they behind the scenes about this potential story? >> not worried because the investigation hasn't produced anything. >> right. >> it's a mess. it was an administrative mess. they acknowledge that. they have a new irs commissioner now, and they're overhauling the way that they deal with those

applications, but nothing has come to light that connected this to the white house or that connected it in any deliberate way to a political motivation, so i think for now because the thing is pretty much faded from attention, it's not much of a worry at all. >> it did until today that is, john, because i guarantee you sound bites of exactly the ones we played about i take the fifth, i take the fifth,ç i ta the fifth, it was run into the midterm elections. jo. those are not going to affect anybody who does not already have a negative view of the administration. >> in the meantime, we still need to talk about what happened between elijah cummings and darrell issa. what's popular on our website right now? the cnbc "hot list" is coming up plus your thoughts on united getting tough on oversized

carry-on luggage and whether it's motivated by service or profits. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.

welcome back. time for "the hot list." what's popping today? >> obamacare. it's back. the latest news, they're going to let grandfather programs stay

past the next presidential election. that's pulling the readers in like fish on a hook. second, we have a nice story about what consumer brands are likely to be affected by the whole russia/u.s. tit for tat thing. names like karlsburg, adidas, ford, gm, chrysler. number three on our "hot list," been hot all day. you were just talking about it. congressmen behaving badly. the irs hearing and representative cummings and representative issa going at it. not only is it my number one story, it's my number one video, too. you have to check it out. very hot on the website. >> having seen it for the first time, it is amazing stuff. kind of worrisome. allen wastler, great to see you, sir. get the tweets in. do you think united's crackdown on oversized carry-ons is a positive? we'll be right back.

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welcome back. united airlines cracking down on carry-on bags. if its attendants catch customers with oversized carry-ons, they have to cough up a check-in fee.

have you been guilty? >> i probably have been. as much as i fly, i probably have been. this is what it's all about. take a look at these displays, sizers, some people call them. checked bag theory that you see at the gate. it tells you the size of both your carry-on, as well as your personal project. a purse, a briefcase, et cetera. united says despite seeing these all over the place, a lot of people are ignoring them. the gate agents are being instructed to crack down on people who are bringing bags that are too big on to the plane. now, united said this crackdown, if you want to call it that, is all about speeding up the boarding process so that it doesn't take as long for the planes to leave. but when you think about the fact that united brought in $638 million last year because of checked bags, and they will likely see an increase in that, if they have to check even more bags, a lot of people are saying, look, this is one more way the airlines are trying to get more fee revenue from the passengers. but the bottom line is this, kelly. you know why this hurts people?

because we live in a world where the rules don't apply to me. everybody does it. don't want to get caught. i've done it in the past. and i probably wouldn't be happy if i got caught. i don't like it when you're trying to take off and there's some fool walking down the aisle with a giant bag. and you know it's not going to fit. >> i was in that situation yesterday, phil. thank you, appreciate it. phil lebeau from chicago. here's a tweet, as well. we were talking about earlier, whether you think this is a good idea or not. here's what one of our viewers had to say. it's about time, airlines. how about if you don't bring on a bag the airlines give you $25. and i like that one. at this point, people will be strapping things on to themselves. >> i think it's a great move. how frustrating is it, the boarding process? it takes forever. make it more efficient. enforce their own rules. >> anybody think this is a bad idea? >> they screwed it up to begin with. they shouldn't have had the bag fees. the bag fees are causing everybody -- >> why shouldn't they have the bag fees? >> the business travels are the

ones that want to carry on. the people who are leisure travelers want to check their bags. they mixed it up. you should tax the people that want to carry it on. and leave the people who want to check the bags alone. you would have no problems. and the business travelers would be able to -- >> there's no way of doing that. with 129 million people flying in the u.s. this month and next month. the bag fees are not the issue. the problem is, the rules are the rules. there's only so much space on a plane. and people -- >> people why are they bringing them a on if they weren't trying to avoid the fee. the average carrier. >> it's not just the fees. it's not just the fees. it's how quickly can you get off the plane and get to your car and out of the airport. >> dr. j., what do you think? >> it's a multimillion-dollar vehicle that is bringing you back and forth. the fact that people are taking too long to get on and off, stops up the system. it's bad for our schedules, as well. >> thanks to all of the panelists for joining me.

"fast money" is coming up in a few seconds. melissa lee, what is on tap? >> we're going to be talking to the ceo of a bio tech company with a prostate cancer treatment that costs, get this, $100,000. the company has been a laggard compared to the big run the biotechs have had. but it is launching this drug in europe. we'll see if this is the catalyst that will turn this stock around. >> wonder if it will be covered under obamacare. "fast money" starts right now. live from the nasdaq market site in new york city's times square. our traders are tim seymour, brian kelly, karen finerman and steve grasso. we have actress-turned stock picker, rachel fox. a 17-year-old trader who has been on shows like "desperate housewives" and "melissa & joey." >> that's the way b.k.'s photo looks. >> very nice. >> first to the top story here. we're on the brink of a historic moment in china. a solar company is